Parker Reports Fiscal 2026 First Quarter Results

CLEVELAND, Nov. 06, 2025 (GLOBE NEWSWIRE) -- Parker Hannifin Corporation (NYSE: PH), the global leader in motion and control technologies, today reported results for the quarter ended September 30, 2025, that included the following highlights (compared with the prior year period): Fiscal 2026 First Quarter Highlights: Sales were a record $5.1 billion; organic sales growth was 5%Net income was $808 million, an increase of 16%, or $927 million adjusted, an increase of 14%EPS were $6.29, an increase of 18%, or a record $7.22 adjusted, an increase of 16%Segment operating margin was 24.2%, an increase of 160 bps, or 27.4% adjusted, an increase of 170 bpsCash flow from operations was $782 million or 15.4% of salesRepurchased $475 million of shares “Our global team produced record sales, segment operating margin, earnings per share and year-to-date cash flow,” said Jenny Parmentier, Chairman and Chief Executive Officer. “These results demonstrate our ability to consistently deliver operational excellence fueled by our business system The Win Strategy™. First quarter organic sales grew 5%, as strong demand continued in aerospace and our industrial businesses showed a gradual return to growth. Positive sales growth and an adjusted segment margin increase of 170 basis points, contributed to an adjusted earnings per share increase of 16%. With this strong first quarter performance and higher order rates, we have increased our outlook.” This news release contains non-GAAP financial measures. Reconciliations of adjusted numbers and certain non-GAAP financial measures are included in the financial tables of this press release. Outlook Guidance for the fiscal year ending June 30, 2026 has been increased and now includes the Curtis acquisition: Total sales growth has been increased to the range of 4.0% to 7.0%. Organic sales growth of approximately 4% at the midpoint; acquisitions of approximately 1%, previously completed divestitures of approximately 1%, and favorable currency of 1.5%.Segment operating margin outlook has been increased to the range of 23.6% to 24.0%, or 26.8% to 27.2% on an adjusted basisEPS guidance has been increased to the range of $25.53 to $26.33, or $29.60 to $30.40 on an adjusted basis Segment Results Diversified Industrial Segment North America Businesses $ in mmFY26 Q1 FY25 Q1 Change Organic GrowthSales$2,044 $2,100 -2.7% 2.1%Segment Operating Income$507 $485 4.5% Segment Operating Margin 24.8% 23.1% 170 bps Adjusted Segment Operating Income$552 $532 3.8% Adjusted Segment Operating Margin 27.0% 25.3% 170 bps Organic growth turned positive, driven by in-plant & industrial, aerospace & defense, and improvement in off-highwayAchieved record adjusted segment operating marginOrder rates increased 3% International Businesses $ in mmFY26 Q1 FY25 Q1 Change Organic GrowthSales$1,399 $1,356 3.2% 1.0%Segment Operating Income$314 $299 5.0% Segment Operating Margin 22.4% 22.1% 30 bps Adjusted Segment Operating Income$350 $327 7.0% Adjusted Segment Operating Margin 25.0% 24.1% 90 bps Achieved record sales and adjusted segment operating marginOrganic growth positive in the quarter with 6% APAC; (3%) EMEA; 0% LAOrder rates increased 6% Aerospace Systems Segment $ in mmFY26 Q1 FY25 Q1 Change Organic GrowthSales$1,641 $1,448 13.3% 12.8%Segment Operating Income$411 $323 27.2% Segment Operating Margin 25.0% 22.3% 270 bps Adjusted Segment Operating Income$492 $403 22.1% Adjusted Segment Operating Margin 30.0% 27.9% 210 bps Achieved record sales on commercial OEM growth and continued aftermarket strengthDelivered record adjusted segment operating marginRobust and broad-based order rates continue Order Rates FY26 Q1Parker+8%Diversified Industrial Segment - North America Businesses+3%Diversified Industrial Segment - International Businesses+6%Aerospace Systems Segment+15% Parker order rates increased across all reported businesses 8%Total company backlog increased to a record $11.3 billion About Parker HannifinParker Hannifin is a Fortune 250 global leader in motion and control technologies. For more than a century the company has been enabling engineering breakthroughs that lead to a better tomorrow. Learn more at www.parker.com or @parkerhannifin. Contacts: Media:Financial Analysts:Aidan GormleyJeff Miller216-896-3258216-896-2708aidan.gormley@parker.comjeffrey.miller@parker.com Notice of Webcast Parker Hannifin's conference call and slide presentation to discuss its fiscal 2026 first quarter results are available to all interested parties via live webcast today at 11:00 a.m. ET, at investors.parker.com. A replay of the webcast will be available on the site approximately one hour after the completion of the call and will remain available for one year. To register for e-mail notification of future events please visit investors.parker.com. Note on Orders The company reported orders for the quarter ending September 30, 2025, compared with the same quarter a year ago. All comparisons are at constant currency exchange rates, with the prior year quarter restated to the current-year rates, and exclude divestitures. Diversified Industrial comparisons are on 3-month average computations and Aerospace Systems comparisons are on rolling 12-month average computations. Note on Non-GAAP Financial MeasuresThis press release contains references to non-GAAP financial information including (a) adjusted net income; (b) adjusted earnings per share; (c) adjusted segment operating margin for Parker and by segment; (d) adjusted segment operating income for Parker and by segment; and (e) organic sales growth. These measures are presented to allow investors and the company to meaningfully evaluate changes in net income, earnings per share and segment operating margins on a comparable basis from period to period. Although these measures are not measures of performance calculated in accordance with GAAP, we believe that they are useful to an investor in evaluating the results of this quarter versus the prior period. Comparable descriptions of record adjusted results in this release refer only to the period from the first quarter of FY2011 to the periods presented in this release. This period coincides with recast historical financial results provided in association with our FY2014 change in segment reporting. A reconciliation of non-GAAP measures is included in the financial tables of this press release. Forward-Looking StatementsForward-looking statements contained in this and other written and oral reports are made based on known events and circumstances at the time of release, and as such, are subject in the future to unforeseen uncertainties and risks. Often but not always, these statements may be identified from the use of forward-looking terminology such as “anticipates,” “believes,” “may,” “should,” “could,” “expects,” “targets,” “is likely,” “will,” or the negative of these terms and similar expressions, and may also include statements regarding future performance, orders, earnings projections, events or developments. Parker cautions readers not to place undue reliance on these statements. It is possible that the future performance may differ materially from expectations, including those based on past performance. Among other factors that may affect future performance are: changes in business relationships with and orders by or from major customers, suppliers or distributors, including delays or cancellations in shipments; disputes regarding contract terms, changes in contract costs and revenue estimates for new development programs; changes in product mix; ability to identify acceptable strategic acquisition targets; uncertainties surrounding timing, successful completion or integration of acquisitions and similar transactions, including the integration of Curtis Instruments, Inc.; ability to successfully divest businesses planned for divestiture and realize the anticipated benefits of such divestitures; the determination and ability to successfully undertake business realignment activities and the expected costs, including cost savings, thereof; ability to implement successfully business and operating initiatives, including the timing, price and execution of share repurchases and other capital initiatives; availability, cost increases of or other limitations on our access to raw materials, component products and/or commodities if associated costs cannot be recovered in product pricing; ability to manage costs related to insurance and employee retirement and health care benefits; legal and regulatory developments and other government actions, including related to environmental protection, and associated compliance costs; supply chain and labor disruptions, including as a result of tariffs and labor shortages; threats associated with international conflicts and cybersecurity risks and risks associated with protecting our intellectual property; uncertainties surrounding the ultimate resolution of outstanding legal proceedings, including the outcome of any appeals; effects on market conditions, including sales and pricing, resulting from global reactions to U.S. trade policies; manufacturing activity, air travel trends, currency exchange rates, difficulties entering new markets and economic conditions such as inflation, deflation, interest rates and credit availability; inability to obtain, or meet conditions imposed for, required governmental and regulatory approvals; changes in the tax laws in the United States and foreign jurisdictions and judicial or regulatory interpretations thereof; and large scale disasters, such as floods, earthquakes, hurricanes, industrial accidents and pandemics. Readers should also consider forward-looking statements in light of risk factors discussed in Parker’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025 and other periodic filings made with the SEC. CONSOLIDATED STATEMENTS OF INCOME Three Months Ended(Unaudited) September 30,(In millions, except per share amounts) 2025 2024 Net sales $5,084 $4,904 Cost of sales 3,177 3,098 Selling, general and administrative expenses 873 849 Interest expense 101 113 Other income, net (107) (31)Income before income taxes 1,040 875 Income taxes 232 177 Net income $808 $698 Earnings per share: Basic $6.39 $5.43 Diluted $6.29 $5.34 Weighted average shares outstanding: Basic 126.5 128.7 Diluted 128.4 130.7 Cash dividends per common share $1.80 $1.63 BUSINESS SEGMENT INFORMATION Three Months Ended(Unaudited) September 30,(Dollars in millions) 2025 2024Net sales Diversified Industrial $3,443 $3,456Aerospace Systems 1,641 1,448Total net sales $5,084 $4,904Segment operating income Diversified Industrial $821 $784Aerospace Systems 411 323Total segment operating income 1,232 1,107Corporate general and administrative expenses 49 49Income before interest expense and other expense, net 1,183 1,058Interest expense 101 113Other expense, net 42 70Income before income taxes $1,040 $875 SUPPLEMENTAL FINANCIAL INFORMATION AND NON-GAAP RECONCILIATIONS ADJUSTED SEGMENT OPERATING INCOME AND ORGANIC SALES GROWTH RECONCILIATION Three Months Ended September 30, 2025 Three Months Ended September 30, 2024 Diversified Industrial SegmentAerospace Systems Segment Diversified Industrial SegmentAerospace Systems Segment (Unaudited)(Dollars in millions) North AmericaInt'lTotalTotal North AmericaInt'lTotalTotalNet sales $2,044 $1,399 $3,443 $1,641 $5,084 $2,100 $1,356 $3,456 $1,448 $4,904 Segment operating income $507 $314 $821 $411 $1,232 $485 $299 $784 $323 $1,107 Adjustments: Amortization of acquired intangibles 42 22 64 76 140 43 22 65 75 140 Business realignment charges 1 13 14 1 15 3 6 9 — 9 Integration costs to achieve 1 1 2 4 6 1 — 1 5 6 Acquisition-related expenses 1 — 1 — 1 — — — — — Adjusted segment operating income $552 $350 $902 $492 $1,394 $532 $327 $859 $403 $1,262 Segment operating margin 24.8% 22.4% 23.8% 25.0% 24.2% 23.1% 22.1% 22.7% 22.3% 22.6%Adjusted segment operating margin 27.0% 25.0% 26.2% 30.0% 27.4% 25.3% 24.1% 24.8% 27.9% 25.7% Reported sales growth (2.7)% 3.2% (0.4)% 13.3% 3.7% Currency —% 1.8% 0.7% 0.5% 0.7% Divestitures (5.1)% —% (3.1)% —% (2.2)% Acquisitions 0.3% 0.4% 0.3% —% 0.2% Organic sales growth 2.1% 1.0% 1.7% 12.8% 5.0% DIVERSIFIED INDUSTRIAL INTERNATIONAL BUSINESSES - ORGANIC SALES GROWTH SUPPLEMENT Three Months Ended September 30, 2025(Unaudited) EuropeAsia PacificLatin AmericaTotalReported sales growth 2.0%5.2%—%3.2%Currency 4.3%(1.5)%—%1.8%Acquisitions 0.3%0.6%—%0.4%Organic sales growth (2.6)%6.1%—%1.0% ADJUSTED NET INCOME1AND ADJUSTED DILUTED EARNINGS PER SHARE RECONCILIATION Three Months Ended September 30,(Unaudited) 2025 2024 (Dollars in millions, except per share amounts) Net Income1Diluted EPS Net Income1Diluted EPSAs reported $808 $6.29 $698 $5.34 Adjustments: Amortization of acquired intangibles 140 1.09 140 1.07 Business realignment charges 15 0.12 10 0.07 Integration costs to achieve 6 0.05 6 0.05 Gain on sale of building — — (10) (0.08)Acquisition-related expenses 14 0.11 — — Gain on insurance recoveries (20) (0.15) — — Tax effect of adjustments2 (36) (0.29) (34) (0.25)As adjusted $927 $7.22 $810 $6.20 1Represents net income attributable to common shareholders.2This line item reflects the aggregate tax effect of all non-tax adjustments reflected in the preceding line items of the table. We estimate the tax effect of each adjustment item by applying our overall effective tax rate for continuing operations to the pre-tax amount, unless the nature of the item and/or the tax jurisdiction in which the item has been recorded requires application of a specific tax rate or tax treatment, in which case the tax effect of such item is estimated by applying such specific tax rate or tax treatment. CONSOLIDATED BALANCE SHEETS (Unaudited) September 30, June 30,(Dollars in millions) 2025 2025Assets Current assets: Cash and cash equivalents $473 $467Trade accounts receivable, net 2,873 2,910Non-trade and notes receivable 331 318Inventories 3,081 2,839Prepaid expenses 296 263Other current assets 173 153Total current assets 7,227 6,950Property, plant and equipment, net 2,972 2,937Deferred income taxes 271 270Other long-term assets 1,306 1,269Intangible assets, net 7,760 7,374Goodwill 11,141 10,694Total assets $30,677 $29,494 Liabilities and equity Current liabilities: Notes payable and long-term debt payable within one year $2,848 $1,791Accounts payable, trade 2,150 2,126Accrued payrolls and other compensation 432 587Accrued domestic and foreign taxes 411 382Other current liabilities 938 933Total current liabilities 6,779 5,819Long-term debt 7,485 7,494Pensions and other postretirement benefits 253 267Deferred income taxes 1,621 1,490Other long-term liabilities 753 733Shareholders' equity 13,777 13,682Noncontrolling interests 9 9Total liabilities and equity $30,677 $29,494 CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months Ended(Unaudited) September 30,(Dollars in millions) 2025 2024 Cash flows from operating activities: Net income $808 $698 Depreciation and amortization 232 229 Stock-based compensation expense 80 76 Loss (gain) on property, plant and equipment 1 (8)Net change in receivables, inventories and trade payables (93) (40)Net change in other assets and liabilities (226) (224)Other, net (20) 13 Net cash provided by operating activities 782 744 Cash flows from investing activities: Acquisitions, net of cash acquired (1,013) — Capital expenditures (89) (95)Proceeds from sale of property, plant and equipment 6 13 Other, net 18 (5)Net cash used in investing activities (1,078) (87)Cash flows from financing activities: Payments for common shares (522) (94)Net proceeds from (payments for) debt 1,056 (409)Dividends paid (228) (210)Other, net — 2 Net cash provided by (used in) financing activities 306 (711)Effect of exchange rate changes on cash (4) 3 Net increase (decrease) in cash and cash equivalents 6 (51)Cash and cash equivalents at beginning of year 467 422 Cash and cash equivalents at end of period $473 $371 RECONCILIATION OF FORECASTED SALES GROWTH TO ORGANIC SALES GROWTH (Unaudited) (Amounts in percentages) Fiscal Year 2026Forecasted net sales 4.0% to 7.0%Adjustments: Currency ~(1.5%)Acquisitions ~(1.0%)Divestitures ~1.0%Adjusted forecasted net sales 2.5% to 5.5% RECONCILIATION OF FORECASTED SEGMENT OPERATING MARGIN TO ADJUSTED FORECASTED SEGMENT OPERATING MARGIN (Unaudited) (Amounts in percentages) Fiscal Year 2026Forecasted segment operating margin23.6% to 24.0%Adjustments: Business realignment charges~0.3%Amortization of acquired intangibles ~2.8%Cost to achieve ~0.1%Acquisition-related expenses ~0.1%Adjusted forecasted segment operating margin26.8% to 27.2% RECONCILIATION OF FORECASTED EARNINGS PER DILUTED SHARE TO ADJUSTED FORECASTED EARNINGS PER DILUTED SHARE (Unaudited) (Amounts in dollars) Fiscal Year 2026Forecasted earnings per diluted share$25.53 to $26.33Adjustments: Business realignment charges0.54Amortization of acquired intangibles 4.55Acquisition-related expenses 0.19Costs to achieve 0.13Gain on insurance recoveries (0.16)Tax effect of adjustments1 (1.18)Adjusted forecasted earnings per diluted share$29.60 to $30.40 1This line item reflects the aggregate tax effect of all non-tax adjustments reflected in the preceding line items of the table. We estimate the tax effect of each adjustment item by applying our overall effective tax rate for continuing operations to the pre-tax amount, unless the nature of the item and/or the tax jurisdiction in which the item has been recorded requires application of a specific tax rate or tax treatment, in which case the tax effect of such item is estimated by applying such specific tax rate or tax treatment. Note: Totals may not foot due to rounding

Parker Reports Fiscal 2026 First Quarter Results

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